Original Press Release
NAM Welcomes USTR Action To Preserve High Tech Agreement
Press release date: May 28, 2008
"Agreements Can't be Unilaterally Redefined," Says Engler
WASHINGTON, D.C., May 28, 2008 -- The National Association of Manufacturers (NAM) commended today's announcement by U.S. Trade Representative Ambassador Susan Schwab that the United States and Japan have requested World Trade Organization (WTO) dispute settlement consultations with the European Union (EU) for circumventing its commitments under the Information Technology Agreement (ITA).
"High tech manufacturers are critical to the vitality of the U.S. economy, and the ITA has spurred innovation and production in the United States by eliminating duties on these products almost all over the world," said NAM President John Engler. "By unilaterally changing the terms of the multilateral 1996 ITA agreement, the EU is creating a competitive disadvantage for U.S. manufacturers and tilting the playing field."
The EU has imposed duties and is threatening to impose additional duties on a variety of high tech products that under the ITA are supposed to be duty-free. For example, computer monitors that can receive video signals are being redefined as television sets with a 14 percent duty.
"Integration of electronics into more and more multifunction products is the future of the electronics industry," said Engler. "We need to encourage this product evolution with liberal tariff treatment, not discourage it with protectionism. If the EU is permitted to make its own definitions of what is covered, everyone else will do so too - and pretty soon the Information Technology Agreement will just be history.
"Exports of high technology goods such as integrated circuits and related products are the largest U.S. export," said Engler. "Maintaining an environment that supports the U.S. high tech manufacturing sectors is critical to the future of U.S manufacturing."
The ITA has made a significant contribution to U.S. and world economic growth by promoting trade, jobs and investment in the information technology sector. World exports of IT products have soared from $600 billion in 1996 when the ITA was signed to more than $1.5 trillion today.
"More sector by sector tariff elimination is one of the best ways to liberalize trade and spur growth," said Engler. "The United States and the EU have a great trade relationship and I am confident the consultations announced today can resolve the issue."
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